Updated | GRECO report: 'Malta clearly lacks integrity standards for government officials'

The Council of Europe's Group of States against Corruption (GRECO) evaluation of Malta was published today, saying that Malta "clearly lacks an overall strategy and coherent risk-based approach when it comes to integrity standards for government officials."

The GRECO report published in its entirety said that stricter rules are needed on ancillary activities of top officials including their involvement in legal constructions and off-shore operations, conflicts of interest, declarations of assets and interests and the general verification and enforcement regarding such rules.

"A system of sanctions is also clearly lacking," the report reads, adding that the criminal justice system was at risk of paralysis and that a redistribution of responsibilities between the Attorney General’s Office, the Police and the inquiring magistrates was required to avoid this situation. 

"Certain institutions have also turned out to have no real added value after 30 years of existence, such as the Permanent Commission against Corruption: it has handled over 400 cases and the limited data available suggests that it has not achieved concrete results to date," it read, adding that the newly established Commissioner for Standards in Public Life, to enforce the integrity standards, "certainly deserves a better fate."

The government of Malta has recently authorised the publication of this report, a report based on evaluations the Council of Europe made between 1 and 5 October 2018.

The report aims to target corruption and integrity in central government and other top executive functions and law enforcement agencies.

These evaluations are made on every country, approximately every four years.

A high perception of corruption

The GRECO report said that opinion polls reveal a high level of perception of corruption and criticises the lack of visible disciplinary or criminal justice response to a number of allegations faced by top officials.

According to the special Eurobarometer on corruption published in December 2017, a large proportion of Maltese respondents consider that bribes, gifts and favours are not acceptable. However, 79% see corruption as widespread in Malta (EU average: 68%).

With regards to perceived corruption in the police and customs, the proportion (44%) is significantly higher than the EU average (31%).

"Even when some of the [allegations] have been confirmed by subsequent audits... the senior officials who have been suspected of criminal or ethical misbehaviour are still in function," the report laments.

Minister Konrad Mizzi (left) and OPM chief of staff Keith Schembri (right), both implicated in potential money laundering red flags

The document highlights the ineffectual conduct of supervisory bodies which are "of little use" since these themselves are "unaccountable and/or ineffective" since they depend heavily on the government's authority.

"State insitutions and the public administration must work in an impartial manner in the furtherance of the common good, and not be a tool at the service of the ruling majority of the moment. A number of European institutions, both at a Council of Europe and EU level, have expressed concerns even with regard to the state of the rule of law in Malta, especially after a journalist who covered many stories was killed,' the report said, referring to the assassination of the late investigative journalist Daphne Caruana Galizia.

Impotent police

The report said that for a country of Malta's size, on paper, the island had an "impressive arsenal of public institutions involved in checks and balance."

However, the framework in place to prevent corruption amongst persons with top executive functions was deemed ineffective.

The effectiveness of these public institutions were questioned in recent years with an "unprecedented wave of controversies", including misuse of state resources and nepotism, conflicts of interest in relation to privatisations, tenders, energy supply, the sale of land, measures to attract foreign investments (including the sale of passports), and the award of contracts and public positions.

Current Police Commissioner Lawrence Cutajar

For this reason, the report questions the effectiveness of public authorities in bringing unethical behaviour to justice.

It called for whistleblowing measures to be introduced in the police force as well as a clear policy on reporting and disclosures coupled with protective measures.

"A Chief Executive Officer was appointed in 2017 to modernise the management of the human resources and to implement the necessary policies needed to restore trust in the police. This can only be welcome," the report reads, adding that a number of desirable improvements included a more robust training system, the introduction of a communication policy and a clear merit-based approach for career decisions and promotions.

The murder of Daphne Caruana Galizia

Two years prior to the assassination of Caruana Galizia, in April 2016, the police received the reports from the Financial Intelligence Analysis Unit (FIAU) on suspicious financial activities involving the government.

Shortly after, the police commissioner at the time, Michael Cassar, went on leave and subsequently resigned for health reasons.

"The inaction of the police led to the subsequent leaking to the press of three FIAU reports concerning government officials. Despite these incidents, especially in the year 2016, the official communication reportedly embellished the situation. The Prime Minister also decided after a government reshuffling to retain the officials concerned (instead of dismissing them) and in 2017 early elections were held, which turned into a plebiscite for the ruling majority," the report reads.

Egrant took Malta by storm in 2017. Pictured: Murdered journalist Daphne Caruana Galizia

It describes the situation as a "crisis" with its culmination being the assassination of Caruana Galizia who had been, at the time, reporting extensively about a number of anomalies in the conduct of public affairs in recent years: overpriced deals for the supply of energy, privatisation of the hospitals tendered to a company without experience in the health sector, sale of land at prices below the market value to party sponsors, sale of passports through foreign investment schemes and possibly involving kickbacks for members and collaborators of the government, nepotism in public appointments, and misuse of public resources among other things.

The report mentions how tremendous foreign support led to the arrest of three suspects. However, it said, these are considered by many as mere executants acting at the request of influential persons. "Public calls were made later on by civil society organisations for the Police Commissioner and the Attorney General to resign due a perceived lack of action," it read.

The report also mentions the 50 page summary related to the magisterial enquiry initated at the request of the Prime Minister and under the terms defined by his lawyers on the Egrant debacle. This was concluded in July 2018 and now almost a year later, the report is still not published in its entirety.

"At the same time the ultimate beneficial ownership of the suspected structures (especially the company called Egrant Inc.) could reportedly not be determined either," the GRECO report said. "The investigation also reportedly confirmed the existence of suspicious elements against other government officials (including payments from the company managing the Maltese investment passport scheme), the banking sector etc.). Still, no step was taken by the head of government in respect of the officials concerned and it remains unclear whether further investigations were opened against them."

Omnipotent Prime Minister

The GRECO report commented on the large powers vested in the Prime Minister of Malta.

It notes the ceremonial role of the President whose powers listed in the Constitution were exercised vicariously through the supremely more potent role of Prime Minister, including the dissolution of the House of Representatives on the basis of the advice of the Prime Minister, and names most members of constitutional bodies with the advice of the Prime Minister, including the Attorney General, judges and magistrates, members of the Public Service Commission, members of the Broadcasting Authority, and members of the Employment Commission.

Prime Minister Joseph Muscat

The power to make appointments to public offices and to remove and to exercise disciplinary control over persons holding or acting in such offices also rests in the Prime Minister.

"It is clear," the report reads, " that the Prime Minister [has] significant powers over the Maltese State apparatus."

GRECO's recommendations

• More robust and systematic awareness-raising measures (e.g. refresher training and workshops, guidance documents, written reminders) should be provided to all persons entrusted with top executive functions, at the start of their term and at regular intervals throughout their term and that information about the integrity requirements for public officials and their observance is made readily available, including by posting such information on the websites of public authorities.

• GRECO recommends that the implementation of the Freedom of Information Act of 2008 be subject to an independent and thorough analysis and that in light of the findings, additional measures be taken so that exceptions to the rule of public disclosure are interpreted and applied more specifically and narrowly.

• It recommends the provision for the disclosure, as a rule, of governmental draft legislation and other texts of particular public interest, accompanied by an appropriate level of consultations and in that context that only specific and limited exceptions to this rule are possible and clearly regulated and that the outcomes of public consultation procedures are published online in a timely and easily accessible manner.

• GRECO recommends that rules be laid down to govern contacts between persons with top executive functions and lobbyists/third parties that seek to influence the public decision-making process and the disclosure of such contacts and the subject-matters discussed.

• A strategy should be developed and implemented in order to increase the capacity, authority and public accountability of State institutions entrusted with regulatory and control functions in relation to the management of public resources.

• The report recommends that measures be taken to solve the legal situation of persons of trust and to limit the number of such discretionarily appointed officials to an absolute minimum, and that those who would perform top executive functions be required to comply with the highest standards of integrity, including as regards rules of conduct, conflicts of interest, declaratory obligations, and supervision by the Commissioner for standards in public life.

• GRECO recommends that the current regime of asset and interest declaration be further developed by extending to persons entrusted with top executive functions, including persons of trust who are associated with a minister’s decision-making, the duty to file a detailed declaration with the Commissioner for Standards in Public Life, and considering including information on the spouses (it being understood that the latter information would not necessarily be made public), and ensuring that all declarations are made systematically, easily and publicly accessible on-line.